Paygo Energy, a Kenyan startup that provides a pay-as-you-go service for cooking gas, has raised $1,43 million in a seed, debt and equity financing round.

The investment will go towards financing the development of a software platform, smart meter, and growing their team among other things, the company says.

“A billion households are forced to cook with dirty fuels every day, which is not only a serious development challenge but also a significant market opportunity. This financing will allow us to invest deeply in our technology, build a service that our customers love and prepare for commercial roll-out,” said Nick Quintong, CEO of Paygo Energy.

Paygo Energy launched in 2016, with a pay-per-use access model for cooking gas. Users pay as little as $0.50 a day via mobile money in a micropayment model based on the amount of gas that they use rather than for a whole cylinder at once. which is currently beyond their economic reach.

Liquefied Petroleum Gas (LPG) has proved to be an ideal energy source for low-income households as an energy solution because other alternatives, such as electricity, kerosene and charcoal tend to be expensive and bad for the users' health. However, it can cost as much as KES 2,450 (US$23) for a 13-kilogram cylinder, which may be out of reach for many households.

With this model, Paygo Energy has established a sizeable customer base in Nairobi that has "welcomed the innovation of pay-per-use cooking via mobile money" as the startup also notes.

Investors in the startup include Novastar Ventures, Energy Access Ventures, Village Capital, Global Innovation Fund, and Global Partnerships/Eleos Social Venture Fund.

"By making clean cooking fuel affordable and accessible", VilCap Investments Co-Founder and Managing Director Victoria Fram says, "Paygo Energy is unlocking the potential for millions more people to improve how they meet one of their most everyday basic needs—feeding their families—in a safer, healthier, and more environmentally-friendly way."

Paygo Energy's future plans include launching across the East Africa region, and this cash injection is expected to help finance this growth.

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